More than one million Americans may be receiving the wrong Obamacare subsidies and the government has not been able to solve the issue yet — meaning people who inadvertently got too much money could face crippling tax bills in upcoming years.
According to internal documents and people familiar with the situation, Americans who listed incomes on their insurance applications that differ significantly with what is on file with the Internal Revenue Service are likely receiving too much money, reports The Washington Post.
"I have this sick feeling that there are these people out there who have made unintentional errors, and in a few years will be subject to massive tax bills,” said Jessica Waltman, senior vice president for government affairs at the National Association of Health Underwriters, a lobbying group for health insurance brokers.
Normally, customers are notified if there is a problem with their applications and told to upload or mail in their proof of income. But only a few have done that, say IRS documents, and even for those who have, the federal computer system for the marketplace isn't able to match the proof with the application because the capability to do that hasn't been built.
The unprocessed documents are being stored at federal contractor Serco's Kentucky office as the improper subsidies keep being paid, and under current rules, people who get the subsidies will be required to return the extra money next year.
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- May 19, 2014 12:15 am
